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[TOKYO] Japanese drugmaker Tsumura & Co said on Friday Ping An Insurance Group Co of China Ltd will become its biggest shareholder by acquiring a 10 per cent stake for 27.3 billion yen (S$328.7 million).
Tsumura is well known in Japan as a prescription drugmaker specialised in "kampo" herbal medicine, which traces its roots back to China.
In a statement, Tsumura, which has annual revenue of about US$980 million, said it will place newly issued shares and treasury stock to Ping An for 3,559.5 yen a share, a 9.4 per cent discount to Friday's closing price.
The deal is set to close on Oct 13, the company said.
Tsumura said the two companies are planning to set up joint ventures in procurement of herbal medicine materials, production and sales of traditional Chinese medicine in China.
The Japanese company said it relies on imports from China for about 80 percent of herbal medicine materials, and that securing stable procurement is becoming critical as growing demand for kampo and Chinese medicine have driven up prices of herbal materials.